An insurance company is offering a new policy to its customers.Typically, the policy is bought by a parent or grandparent for achild at the child’s birth. The details of the policy are asfollows: The purchaser (say, the parent) makes the following sixpayments to the insurance company:
First birthday: $ 760
Second birthday: $ 760
Third birthday: $ 860
Fourth birthday: $ 850
Fifth birthday: $ 960
Sixth birthday: $ 950
After the child’s sixth birthday,no more payments are made. When the child reaches age 65, he or shereceives $260,000. The relevant interest rate is 10 percent for thefirst six years and 7 percent for all subsequent years.
Find the future value of thepayments at the child's 65th birthday: Future Value$____________
FV1 = $xxx
|xx||xxxxx xx Yxxx 6 = $1,223.99 +x,xxx.xx + x,xxx.xx + x,xxx.xx + x,xxx.xx + xxx||xxxxxxx xxx xx of xxxx lump xxxxx xxx xxxxxxxx;x 65th xxxxxxxy:|
The xxxxxy xx xxx worth xxyxxx; the xxxxxx xxxxx xx the xxxxxxxxxx $352,870.55, xxx xxx xxxxxy contract xxxx pay xxx $xxx,xxx. xxxxxxxxxxx are xxxxx $92,870.55 xxxx xxxx xxx policy xxyxxx.